Amazon snares nearly $12 billion in US online sales during Prime Day ‘22, but it’s still not all smiles for the eCommerce titan.
Amazon’s 8th annual Prime Day (July 12th and 13th) was the company’s biggest ever to-date. According to Amazon’s official press release, Prime members around the world purchased over 300 million products during the two-day sales event and saved more than $1.7 billion. More than 100,000 items were purchased per minute worldwide with the US accounting for 60,000 of those orders. Amazon was also proud to announce that small businesses were able to generate $3 billion+ in the three weeks leading up to this year’s Prime Day; shoppers bought more than 100 million products sold by third-party Amazon Marketplace merchants. Though Amazon did not publish their worldwide sales figures for Prime Day 2022, Reuters reports that US sales were just shy of $12 billion, an 8.5% year-over-year increase from last year’s Prime Day sales “holiday”. Online sales exceeded $6 billion on just the first day of alone.
Digital Commerce 360 estimates that Amazon’s global sales for Prime Day 2022 reached $12.9 billion, an 8.1% increase year-over-year from Prime Day 2021. Prime Day 2021 took in $11.19 billion worldwide which resulted in a growth rate of 7.7% over Prime Day 2020. Amazon’s 2021 Prime Day was held less than a full year after their 2020 event. The shorter time frame between the annual events had the unfortunate side effect of slowing down sales growth from 45.1% during the earlier phases of the COVID pandemic. The period between 2018 and 2020 saw the largest increase in sales, from $4.15 billion in 2018 to $10.39 billion in 2020, but the COVID pandemic forced Amazon to postpone their 2020 Prime Day to mid-October as manufacturing, shipping, and available inventories were all negatively affected by COVID.
A Return to Normalcy?
But while Amazon’s public announcement and the corresponding sales figures suggest that the world might finally be bouncing back to pre-pandemic normalcy, things aren’t exactly as bright and chipper as they may seem. The economy is still reeling from the damage done by COVID and the unfettered inflation that came with it. COVID itself continues to tear through the world as even more new variants are discovered and cause even more damage. Global inflation continues to rise and the ongoing Russo-Ukrainian War is contributing to both escalating economic and political instability throughout the world. In the US, inflation has skyrocketed to a 40-year high, plus threats of yet another economic recession in the near future have the American public not only making conscious decisions on their purchasing habits with discretionary spending.
Summary of Amazon Prime Day 2022
Worldwide
- This year’s Prime Day event resulted in more than 100,000 items being purchased worldwide per minute.
- Best-selling categories include: Amazon Devices (Fire TV, Echo speakers, etc.), Consumer Electronics, and Home.
- Shoppers worldwide did most of their shopping between 9AM and 10AM (Pacific) on Tuesday, July 12th.
- Small businesses included in the Support Small Businesses to Win Big sweepstakes received over $3 billion in sales in the three weeks leading up to Prime Day.
- The three weeks leading up to Prime Day saw over 100 million small business items purchased by customers.
US Domestic
- More than 60,000 items were purchased in the US per minute.
- Best-selling categories include Consumer Electronics, Household Essentials, and Home.
- US shoppers did most of their shopping between 8PM and 9PM (Pacific) on Wednesday, July 13th.
- Premium beauty products from Laneige and NuFace were top-sellers during Prime Day in the US, as were Crest Teeth Whitening and Oral-B electric toothbrushes; kids’ and baby clothing from Simple Joys by Carter’s; Levi’s clothing, Shark vacuums, air purifiers and steam mops. On the tech side, Apple Watch Series 7; Beats by Dre headphones; and Amazon Devices were the top-selling items.
- A total of 50 U.S. states participated in the Support Small Businesses to Win Big sweepstakes, with Delaware, New York, and Wyoming generating the most sales per capita during the three weeks leading up to Prime Day.
Prime Day’s Impact on Small Businesses
Amazon’s marketing campaign for Prime Day 2022 included their Win Big by Supporting Small initiative. Shoppers who purchased select qualifying products from eligible small businesses were automatically entered in a drawing to win such prizes as tickets to Super Bowl LVI. Amazon’s post-Prime Day press release declared a victory for small businesses; $3 billion+ generated in small business sales and over 100 million products sold by Marketplace merchants. However, in this report by Digital Commerce 360, small businesses did not share the same enthusiasm with this year’s 2-day Prime Day sales event.
Tamika Richie of the Marketplace brand Just What You Need said that while sales were higher for gift items sold on Prime Day compared to average days, those sales were actually less than on previous Prime Days. Richie estimated that sales for Prime Day 2022 were down 9% over last year, “Prime Day itself was great, but it was definitely better last year–and I heard the same sentiment amongst other sellers.” She had also declined to seek one of Amazon’s small business identifying badges (Woman-Owned, Innovators, Black-Owned, etc.), citing her disagreement with Amazon’s constrictive rules and regulations placed on third-party retailers using the Marketplace.
Richie believes that the public has grown jaded over Prime Day and don’t carry the same anticipation as they did in the past, as Prime Day has now become an annual expectation instead of a surprise occurrence. “People no longer get excited about it, and that was the beauty of Prime Day in the past. You didn’t know when it might happen. There was a spontaneity about it that’s gone now.” This opinion is also shared with Gregory Ng, CEO of Brooks Bell. Ng told Digital Commerce 360: “While Amazon has been trying to make Prime Day a holiday, the reality is it doesn’t have a compelling event attached to it like Christmas morning. Instead, it caters to people seeking a deal and this just isn’t the temperature right now with consumer spending habits.”
Alternatively, Tom Funk of Ann Clark Cookie Cutters said that Amazon had automatically placed one of their identifying badges on the marketplace’s page due to the company’s consistent high Amazon’s Choice ranks. Regardless of Amazon’s attempts to boost the brand into prominence during Prime Day, Funk said that gains were only modest during this year’s 48-hour Prime Day sales event. “It was an ‘up’ day, but it wasn’t like a stunningly ‘up’ day. Last year, we had a very big Prime Day because we had some very deep discounts. This year, we didn’t really do much discounting at all.”
The reduction of available discounts continues the trend first seen during Black Friday and Cyber Monday 2021. Many of the reasons still carry over from last holiday season as well: rampant inflation, COVID-related supply chain disruptions, socio-political and economic unrest, and the consumer public’s attention to bargain-hunting being spread out through the entire year as opposed to specific periods. These reasons are also behind the rise of Green Consumerism and the Small Business Renaissance that we reported in our piece from earlier this year, eCommerce Trends 2022. Contrary to Amazon’s self-celebratory Prime Day press release, the public still holds the Amazon brand in a negative light and a sizable percentage of the consumer public has decided to break ties with Amazon as a result. That, unfortunately, also brings about consequences for small businesses that rely on the Amazon Marketplace for the bulk of their income. Amazon’s top rivals Walmart, Shopify, and Google are all actively working (and in some cases, unintentionally working together) to court both the consumer public that wishes to no longer do business with Amazon as well as the independent small businesses that are unaffiliated with Amazon. Small and medium businesses that are affiliated with Amazon through the Marketplace are often treated as Amazon-branded shops, which will cause some shoppers to instinctively boycott them outright. It’s the scarlet letter of sorts for small and medium businesses, though at the same time, Amazon’s advertising power and undeniable public brand awareness are far too great to ignore. Small and medium businesses would be wise to take full advantage of Amazon’s marketing prowess and notwithstanding Amazon’s oppressive regulations for third-party merchants, some are more than willing to deal with Amazon’s ruthlessness in exchange for the easy mass exposure they might not receive on their own.
Prime Day From the Consumer’s Perspective
Just as third-party retailers on the Amazon Marketplace shared a general feeling of indifference towards this year’s Prime Day, so did the consumer public. Digital Commerce 360 surveyed 875 online shoppers this month and while few showed enthusiasm towards Prime Day, roughly a quarter of them were left with a degree of contempt and disappointment. There was almost the same percentage of respondents who thought deals met expectations (29%) as those who were disappointed (25%). Out-of-stocks were not cited as a problem, likely because items that retailers promoted were in stock, despite 18% believing there was a more limited selection. Both Amazon and other retailers are charging higher prices than they did a year ago, according to 11% of respondents.
Urgency was trivial among consumers and a common practice seen this year was to load up the cart prior to the first day of Prime Day and then dump most of it when discounts failed to meet expectations after launch. This behavior was shared among 24% of those surveyed. In tandem with inflation, economic concerns, and the lack of disposable income, shoppers were also focused more on key essentials rather than non-essential products. Replenishment items, such as household goods, toiletries, and cleaning supplies were popular sellers though the bulk of the survey participants had sales stretching across many product categories.
68% of online shoppers spent up to $250 on Prime Day. 41% spent $100 or less, 58% spent more than $100, and 1% spent nothing at all. Less than half of the respondents spent more on this year’s Prime Day than they did in 2021, but on-par spending was at 37% and 17% spent even less than last year. In conjunction with the underwhelming amount of available deals on Prime Day, other factors such as inflation, the likelihood of another major economic crash akin to 2007-2008, and socio-political unrest throughout the country and the rest of the world also played a part in how the survey participants shopped during Prime Day. Some shoppers also used Prime Day to prepare for the upcoming holiday season, though most did not. Still, Prime Day does carry some bearing on the potential outcome of this year’s holiday shopping rush but the effects obviously won’t be seen nor felt until that time comes.
Amazon’s top rivals were also in full force, countering Prime Day with sales and promotions of their own which coincidentally happened to fall during the same 48-hour period between July 12th and 13th. Of those surveyed, 19% admitted to also purchasing through Walmart; 15% shopped at Target; 8% went to Costco; 7% sought out eBay and Best Buy; and The Home Depot claimed 6% of double-dipping Prime Day shoppers.
A Win for Amazon?
As to whether Amazon Prime Day 2022 was a success or not depends on your definition of the word ‘success’. $12.9 billion in sales over a mere 48-hour period is, understandably, a healthy chunk of change to be made in such a quick amount of time. But such figures aren’t exactly what the eCommerce industry expects, especially from a retail behemoth such as Amazon.
For the first time in its 8-year run, products sold through third-party retailers on the Amazon Marketplace outpaced Amazon’s own product sales. Data recorded by Numerator shows that inflation influenced consumer behavior. Tech sales were typically dominant during Prime Days past but this year, household essentials beat out consumer electronics at 29% to 27% respectively. Average order sizes jumped from last year’s $44.75 to $52.26, no doubt reflective of the current economic situation. A survey of customers stated that 83% of Prime Day shoppers cited inflation as the biggest determining factor of their Prime Day purchases; 34% waited for deep Prime Day discounts while 28% chose not to spend on certain products because they were deemed non-essential.
Amazon themselves have been on somewhat of a downward spiral as of late. 2021 was Amazon’s worst year since 2014; company growth slowed due to rising labor costs, loss of market share, decreasing profits, and an increasing negative sentiment among the public. The company’s troubles became even more apparent during their tumultuous 2021 performance in the S&P 500 and NASDAQ composite, even underperforming against every other FAANG stock. Tech rival Goggle had even managed to regain small bits of market share that was previously lost to Amazon, market share that Google themselves had been bleeding for years on end. Additionally, the Prime subscription price hike from last February resulted in a user base growth stalemate as former subscribers who were disenfranchised by the rate increase took their business to Amazon’s #1 competitor, Walmart.
During the early days of Prime Day, Criteo, a company that helps merchants increase their return on advertising, reported slow sales. In comparison with 2021, there was a 26% decrease. Criteo also reports that the first 36 hours of Amazon Prime Day 2022 didn’t produce as strong sales numbers as 2021. Amazon Prime Day sales increased by 163% midday of the first day of sales in 2021 but midday sales increased only by 52% in 2022, with a high of 74% at 9PM. The second day of sales in 2021 saw an increase of up to +94% midday, whereas the increases for 2022 were just slightly over 72%.
A Win for the eCommerce Industry as a Whole
Even with Prime Day 2022’s shortcomings in the eyes of the consumer public, small businesses, and Amazon themselves, the 2-day promotion was a big winner for the eCommerce industry. US online spending between July 12th and 13th hit $11.9 billion across retailers ($6 billion on Day 1, $5.9 billion on Day 2). The Adobe Digital Economic Index notes an 8.5% increase over last year’s Prime Day total online revenue of $11 billion.
Available discount levels were consistent throughout both days, with none overshadowing the other. The biggest discounts were found with toys and apparel (15% and 12% respectively) while other product categories had lower-though-still-significant discounts such as consumer electronics (6%), TVs (3%) and computers (8%).
Compared to an average June day, the average online revenue boost in the US was 141%. The states which experienced the biggest increases in revenue were Montana (172%), North Dakota (171%), and Alaska (166%). All three states had their revenue top out during Day 2 of Prime Day. Conversely, the least amount of revenue gains were in New Hampshire (123%), Iowa (119%), and Rhode Island (103%).